Govt tries to sell fixed wireless licences for fourth time

This time they're giving companies 12 months to buy

Common Topics

The government is trying for the fourth time to get people interested in the licences that offer fixed wireless access. Let's hope it's a bit more successful this time.

The people behind the licence sale, the Radiocommunications Agency, got together last month for a seminar over broadband fixed wireless access (BFWA) and plucked up enough courage to have another stab at it. New legislation will kick in next week that will see them go up for sale again.

The original auction for the 15-year 28GHz licences was held in November 2000, having already been delayed for six months. It was a complete shambles. Only eight bidders entered the auction and only 16 of the 42 licences were actually sold. Only a minority of these received more than one bid.

The net result was that the government made the grand total of £38.2 million, when it had originally expected £2 billion.

The e-minister at the time, Patricia Hewitt (now trade secretary), went to ground but reappeared in February to try to persuade people to buy them. Nothing happened. The elusive new e-minister Douglas Alexander tried again in July this year.

The problem was that the DTi refused to change its model for selling the licences, most likely out of pride. It did behave less arrogantly towards potential bidders but that still wasn't enough to get people to actually buy them.

Now, however, the government will give companies 12 months to buy any of the licences. There remains a minimum bid of £1 million or £2 million, depending on the region, but it has ditched the auction approach. If a company puts in a bid now, and no one else enters the fray within 20 days, their bid will be accepted.

It's a far cry from the government that was still rolling around in the proceeds from the 3G auction when they first launched the wireless auction.

The prospects for the licences look good though. You own them for 15 years for one thing so even if it doesn't make financial sense at the moment, it will at some point. Plus ADSL roll-out will remain painfully slow for the next few years so there's an opportunity there.